UK's Vodafone may finally have found resolution on its Rs 20,000 crore tax feud with the Indian government that has now lasted eight years after Finance Minister Arun Jaitely on Monday proposed a new dispute resolution scheme in cases of retrospective taxation.

Under the new dispute resolution scheme, Jaitely's proposal will allow tax arrears to be paid in lieu of interest liabilities in cases of retrospective taxation. Besides Vodafone, the new proposal could benefit other high profile cases such as Cairns, among 3,00,000 tax cases amounting to Rs 5,50,000 lac crores.

A high level committee headed by the Revenue Secretary will oversee creation of fresh liability using retrospective tax legislation, Arun Jaitley said in his annual budget speech.

According to officials, the company should have deducted the tax from its payment to Hutchison and paid to the government. Vodafone challenged the claim saying that no tax was payable since it was a deal between two foreign companies, a view backed by the Supreme Court in January 2012.

The government later that year changed laws to tax such transactions retrospectively.

In 2013 there was talk that the company had resolved with the Finance Ministry to pay the principal and forgo the interest, but the Indian government went on to claim the entire amount on record. The government and Vodafone that went into international arbitration have since been unable to even appoint mutually agreed upon arbitrators.